Thursday’s Master Investor Market Report, featuring United Utilities, Royal Mail, SSP Group and Young & Co

The Office for National Statistics has released data for April showing that retail sales were 4.7% higher than a year ago and up by 1.2% from the prior month, with growth driven by an exceptional performance in the clothing sector. The supermarket price war continues to apply downward pressure and the cost of fuel also dropped. Chris Williamson from Markit said that “with retail sales numbers as strong as these seen in April, rate hikes later this year are certainly a growing possibility”.

The Payments Council has said that 52% of transactions made in the UK during 2014 used cashless methods, the first time that coins and notes have comprised a minority of payments made. Experts believe that the shift to digital will accelerate in the coming years.

The FTSE 100 rose 6.21 points to 7,013.47 points; the FTSE 250 fell by 19.02 points to 18,154.55; the FTSE All Share increased by 3.31 points to 3,809.08 points; and the FTSE
AIM All Share finished the day up 1.02 points at 763.65 points.

Water supplier United Utilities (UU.) saw revenues for the year ended 31st March increase by 1.8% to £1.7 billion. Underlying profits before taxation for the the year also rose by £59 million to £447 million, but dropped on a statutory basis. Management expect capital spending to fall in the current financial year and the firm will be keeping a close eye on costs in light of an anticipated rise in operating costs and the tough pricing schedule set out by regulators for 2015-2020. United Utilities shares dropped 3p to 1,006p.

Postage and delivery firm Royal Mail (RMG) recorded broadly flat revenues of £9.4 billion in the year ended 29th March, despite an unexpected improvement in its General Logistics Systems arm, which was offset by UK letter and parcel deliveries not reaching forecast levels. Management said that current trading was as expected, but analysts from Deutsche Bank warned of “material headwinds ranging from rising competition in UK Parcels, GLS, structural decline in mail volumes and cost pressures on GLS Germany”. The shares climbed 0.1p to 500p.

Shares in food outlet operator SSP Group (SSPG) fell by 10.2p to 302p today, despite the announcement of the company’s first interim dividend. Revenues for the 6 months ended 31st March contracted by 0.8% to £859.2 million due to foreign currency effects and net contract losses. However, there was some positive news on profitability due to a 60 basis point rise in operating margins. Analysts remained positive, with Canaccord describing the results as “excellent” due to the second half weighing in the industry.

Brewery and pub landlord Young & Co.’s (YNGA) posted revenues of £227 million for the year ended 30th March, a 7.7% improvement over the prior 12 months, driven by the addition of 8 pubs and 76 hotel rooms to its portfolio alongside strong demand for drinks and food at existing outlets. Profits before taxation grew by 18% to £32 million and broker Panmure Gordon said that it expects this to rise to £33.4 million in the current year. Shares in the company rose by 25p to 1,110p.